Balancing governance binghamton 6 2011

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  • 1. Balancing Good Governance & Management for Nonprofits
    June 9, 2011 | Binghamton, NY
    Presented by
    Doug Sauer, CEO
    www.nycon.org | 800.515.5012
  • 2. Key Learning Objectives
    Understanding ways to effectively balance the authority & responsibilities of the board & management
    Learn the keys to balancing proactive leadership with good management
    Gain awareness of ways to enhance mutually constructive & supportive communication between the board & executive leadership
    Become aware of best practices for executive evaluation & compensation
    Be prepared for managing staff leadership transition
  • 3. Basic Definitions
    Governing  “to exercise authority or control”
    Managing  “To bring about or succeed in accomplishing”
    Leading  “Coming in advance of others”
  • 4. “Management works in the system; leadership works on the system.”Stephen R. Covey
  • 5. Nonprofit Leadership is a Process that is…
    Defined by the mission, history, culture & services of the nonprofit
    A team experience where power & roles are distributed
    Influenced by position, personality, style, knowledge, & skills
  • 6. Ethical Nonprofit Leadership
    Actions are consistent with the nonprofit’s mission, values, promises & obligations
    Actions have Integrity: Not driven or influenced by personal interests, gain or inurement
    Adheres beyond the “letter” of legal & regulatory requirements to “the spirit of”
    Focuses on the question of what is the “right” or “correct” thing to do
    Documents decision-making processes & actions to demonstrate & record proper conduct
  • 7. “Management is doing things right; leadership is doing the right things.”Peter Drucker
  • 8. Balancing Roles for Organizational Leadership
    "Managers Who Lead; Leaders Who Manage"
    Managers
    Leaders
    Vision
  • 9. Building Your Leadership Team
    To harness the collective talent & energy of your team members, both board & staff, to accomplish your mission, vision, goals & objectives
  • 10. Leadership Starts with the Board
    Volunteer Leaders who advance the Mission in a Responsible Manner
    Duties of the Fiduciary
    Care
    Loyalty
    Obedience
  • 11. The Board-Staff Leadership Team
    Board of Directors
    Board Officers
    Committee Chairs
    Executive Director/CEO
    Assistant/Deputy Director
    Fiscal Officer
    Top Division/Program Heads
    Clearly define decision authority along with
    responsibilities in bylaws, job descriptions & policies
  • 12. The Leadership Team…
    Sees & understands the big picture - external & internal
    Motivates - inspires trust & confidence in staff, board members, constituencies & stakeholders
    Recognizes own limitations; recruits & uses staff & board members accordingly
  • 13. The Leadership Team… (continued)
    Mobilizes & uses resources wisely
    Governs & manages well – holds self & others accountable
    Resolves crisis & embraces change
    Provides vision & strategic direction
  • 14. “Management is efficiency in climbing the ladder of success; Leadership determines whether the ladder is leaning against the right wall.”
    Stephen Covey 
  • 15. Major Governance-Management Areas
    Board Management & Development
    Human Resources
    Finances/Fixed Assets
    Resource Development
    Stakeholder-Constituent Representation
    Programs & Services
    Strategic Directions & Planning
  • 16. Policy & Implementation Spheres
    Board of Directors
    Policy-making
    Area of Shared Responsibilities
    Executive Director/CEO
    Operating
    Policies
    Area of Shared Responsibilities
    Staff
    Implementation
  • 17. Balancing Leading with Managing
    Managing…
    • See the trees in the forest
    • 18. Maintain systems
    • 19. Control & tinkers
    • 20. Manage crises
    • 21. Seek efficiencies
    • 22. Focus on procedures & personalities
    Leading…
    • See the forest through the trees
    • 23. Change systems
    • 24. Shape & influence
    • 25. Turn crises into opportunities
    • 26. Seek investment
    • 27. Focus on vision & concepts
  • 28. The ED/CEO
    At-will or contract employee
    Is accountable for all organizational performance & exercises authority as designated by the board
    Accomplishes expectations as established by board policies & directions
    ED’s performance is significantly related to organizational performance, at both the board & operational level
  • 29. Clearly Define ED/CEO’s Authority vis-à-vis the Board
    Define general & lasting parameters in bylaws
    Have updated, board approved job description or clearly defined contract
  • 30. State Key ED/CEO’s Job Responsibilities in the Bylaws
    Chief paid administrative officer
    Administers day-to-day affairs (financial, personnel, program, etc.) within policies established by board
    Ensures compliant & ethical implementation of board policies & directives & all applicable laws & contractual requirements
    Hires, supervises, evaluates, & terminates all staff
    Inform, support & advise the board & its committees
    Safeguards fiduciary obligations & Signatory
  • 31. Executive Limitations
    Constraints on executive authority which establish prudent & ethical boundaries. Within these boundaries lie the “acceptable” arena of executive activity & decisions
    To not risk losses beyond those necessary in the normal course of business or as otherwise determined by the board
  • 32. The Delicate Balance of the Board
    Board of Directors
    Board Committees
    Executive Committee
    Officers:
    Secretary
    Treasurer
    Vice President
    President
    Critical Relationship Center
    Executive Director/CEO
    Assistant Director
    Fiscal Officer
    Managerial Staff
    Program and Support Staff
  • 33. Core Elements to Positive Board-ED/CEO Relations
    • Mutual trust & confidence – earned & tested
    • 34. Openness
    • 35. Mutual understanding of & respect for responsibilities, boundaries & limitations
    • 36. Define & follow an accountability structure
    • 37. Competence
    • 38. Style “fit” – managerial, leader, entrepreneurial, decision-making methods, personality, etc.
  • Ways to Support the ED/CEO
    View as a mutually supportive partner
    Convey sense that challenges are shared
    State appreciation of achievements
    Encourage professional growth
    Recognize and respond to administrative needs
    Watchdog workload
    Encourage earned time off
    Evaluate regularly
  • 39. Tips for Evaluating the ED/CEO
    Conduct written evaluations at least annually
    Design instrument that is comprehensive, goal oriented & looks at past as well as future
    Consider including a written self-evaluation
    Design process that involves the board’s leadership & informs all board members
    Avoid involving staff & one board member or officer doing the evaluation
    Assign committee in bylaws – Executive and/or Compensation Committee
  • 40. Tips for Evaluating the ED/CEO (continued)
    Meet without the ED/CEO to prepare & anticipate sensitive and confidential matters
    Handle serious problems or disciplinary issues carefully….be risk management conscious
    Link compensation to the evaluation
    Allow limited ED/CEO feedback regarding the board’s functioning & how it relates to his or her performance
  • 41. Considerations for Determining Executive Compensation
    • Salary vs. Benefits vs. Perks: “Total Compensation”
    • 42. IRS 990 Key Employee Report; “Excess Compensation”
    • 43. Evaluation results with respect to individual & organizational performance
    • 44. Current & future needs & directions of the organization
    • 45. Job requirements
    • 46. Competitive labor market
    • 47. Equity
    • 48. IRS & state agency criteria
    • 49. Funder or donor perception
    • 50. Should be determined by full board action
  • ED/CEO Succession Planning
    • Goal is to maintain continuity with minimal disruption in an emergency, temporary or permanent transition
    • 51. Control the message to the various audiences
    • 52. Expect the unexpected!
    • 53. Maximize opportunities for positive change
    • 54. Create framework for search process; who is going to do what & how
    • 55. Consider an Interim Executive
    • 56. Then hire the right candidate
  • Role of ED/CEO in Succession Planning
    ED/CEO should have plans for back-up when he or she is not available
    ED/CEO needs to think succession & back-up when key management staff turn-over occurs
  • 57. Key Points to Remember to Board-ED Relations
    To act in good faith & with the diligence, care, loyalty, & skill which reasonable persons would exercise under similar circumstances
    The board as a collective is the employer as a collective, not individual members
    The ED/CEO is the board’s key employee & partner
    Both the board & ED/CEO provide leadership
    The board governs
    The ED/CEO contributes to governance & is accountable to the board for all management & staff functions
    The interactions between the board & ED/CEO sets the organizational climate
  • 58. Added Ideas, Comments, Questions?